Piramal to sell diagnostic chain to SRL for Rs 600 cr

Piramal Healthcare on Wednesday said it will sell its diagnostic unit to Super Religare Laboratories (SRL), promoted by billionaire brothers Shivinder and Malvinder Singh, for Rs 600 crore.

Piramal Healthcare and SRL have entered into an agreement for SRL to acquire Piramal Diagnostics Services Ltd (PDSL), Piramal said in a filing to the Bombay Stock Exchange. Post the deal, SRL will become the country's largest diagnostic services provider by acquiring PDSL's network of 107 laboratories, with an FY'10 revenue of over Rs 200 crore.

"This combination creates one of the largest and best in class service providers not just in India but also in Asia, given our existing presence and relationships in the Middle East and SAARC countries," SRL Promoter Shivinder Mohan Singh said. Piramal will receive Rs 300 crore on closing of the deal and the balance over a period of three years.

Commenting on the deal, Piramal Group Chairman Ajay Piramal said: "We feel it is the right time to take the business to the next level and this development will give it the scale and size to serve a much larger base of Indian customers with a high level of quality and care." Piramal will continue to be on the Board of Directors and the Executive Committee of SRL even after the buyout, the statement added.

Shares of the company rose nearly three per cent to touch a month-high of Rs 524 in the early trade on the BSE.